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Hi there, filed Ch 7 bankruptcy, got my discharge two months ago. The Trustee originally tried to short sell my house. Now the lender won the automatic stay, and the trustee is no longer involved. I have an offer for my house via short sell...the buyer really wants the house. I don't want to get hit with any tax implications, or any monies owed. What is the best path for me to go to protect myself? Should I do the short sale, or do a Deed in Lieu...or should I just let the house Foreclose? What is the best route for me to take? Which path would go the smoothest? Which path has the least headaches involved? My main concern is any deficiencies owed or any tax monies owed on the debt forgiveness. I did surrender the house and mortgage debt in CH 7, and the bankruptcy has been discharged and closed. Thanks
Hi there, filed Ch 7 bankruptcy, got my discharge two months ago. The Trustee originally tried to short sell my house. Now the lender won the automatic stay, and the trustee is no longer involved. I have an offer for my house via short sell...the buyer really wants the house. I don't want to get hit with any tax implications, or any monies owed. What is the best path for me to go to protect myself? Should I do the short sale, or do a Deed in Lieu...or should I just let the house Foreclose? What is the best route for me to take? Which path would go the smoothest? Which path has the least headaches involved? My main concern is any deficiencies owed or any tax monies owed on the debt forgiveness. I did surrender the house and mortgage debt in CH 7, and the bankruptcy has been discharged and closed. Thanks
Your attorney should have explained to you that Chapter resolves this indebtedness. You neither owe the debt so the deficiency is no longer an issue and the tax burden on forgiven debt is not a factor.
Every path will not be smooth unless you simply leave the house, and smoother still if they agree to a deed-in-lieu.
My attorney is somewhat not very explanatory and hard to get a hold of at times...sadly. That's why I posted this thread. We have a great buyer who is willing to go thru the process and wait, for the short sale. The lender won back the house from the bankruptcy trustee two weeks ago, lifting the automatic stay. So now I am dealing with lender directly and a realtor. They are also offering for me to do a Deed in Lieu as well. With the deed in lieu, I would get some cash for keys my lender told me, but not much,..like $1500 from Washington Trust bank. The short sale gives me more time in the house, opposed to the Deed in Lieu, which I do need at least 3 months rent free, to save relocation money. I believe the short sale is a longer process. I can also just let the house go thru regular foreclosure, which would also give me ample time to save money in my house. But I figured I would lean more toward the short sale, and if the bank rejects the short sale offer, then I would go for the Deed in Lieu I am thinking. I just want to protect myself in the end, and choose the path with the least amount of headaches involved. Short Sale wouldn't hit my credit as hard I read, as well. Thanks for your reply, much appreciated. Yes, deficiency monies owed, and tax implications were my main concern...receiving a 1099C down the road...etc...
Hi there, filed Ch 7 bankruptcy, got my discharge two months ago. The Trustee originally tried to short sell my house. Now the lender won the automatic stay, and the trustee is no longer involved. I have an offer for my house via short sell...the buyer really wants the house. I don't want to get hit with any tax implications, or any monies owed. What is the best path for me to go to protect myself? Should I do the short sale, or do a Deed in Lieu...or should I just let the house Foreclose? What is the best route for me to take? Which path would go the smoothest? Which path has the least headaches involved? My main concern is any deficiencies owed or any tax monies owed on the debt forgiveness. I did surrender the house and mortgage debt in CH 7, and the bankruptcy has been discharged and closed. Thanks
If you surrendered the house....how are you even involved with selling it?? In my experience surrendering back to the mortgage company.....is the end of it for you.
I think that you should go talk to your bankruptcy attorney and get some clarity on where you are regarding this house. If you reaffirmed it, if you are still making payments.....then you are still responsible for the debt and are still buying the house.
If you discharged the house/mortgage....then it belongs to the creditor/mortgage co.
You seem a bit confused when you use the term "automatic stay"....That is the period immediately following filling your bankruptcy...when creditors cannot attempt to collect any monies from you....it is the 30 day period between the court filing and your court date in front of the bankruptcy judge.
Call and schedule an appointment with your bankruptcy attorney and have your attorney explain the differences in your responsibility based on the questions you have asked. You certainly don't want to make a legal mistake where bankruptcy is concerned.
I Surrended the house in chapter 7. The trustee owned the home until my bank won the house back during a court hearing two weeks ago. My bankruptcy was discharged three months ago. So now all the decisions are back in my hands not in my bankruptcy trustees hand as was the case a few weeks ago. So now it's up to me as to what I want to do and because I have a good buyer and a good offer I was considering redoing the short sale. My primary concern and purpose of this thread was would I be liable for any deficiencies or any tax implications on the deficiency amount. My assumption is that I wouldn't be because the mortgage debt was was surrendered in bankruptcy Chapter 7
My original bankruptcy lawyer is not very communicative. That's another reason why I put up this thread just to see if I can get some additional information from some knowledgeable people.
I Surrended the house in chapter 7. The trustee owned the home until my bank won the house back during a court hearing two weeks ago. My bankruptcy was discharged three months ago. So now all the decisions are back in my hands not in my bankruptcy trustees hand as was the case a few weeks ago. So now it's up to me as to what I want to do and because I have a good buyer and a good offer I was considering redoing the short sale. My primary concern and purpose of this thread was would I be liable for any deficiencies or any tax implications on the deficiency amount. My assumption is that I wouldn't be because the mortgage debt was was surrendered in bankruptcy Chapter 7
Your credit is hosed & there's no benefit to short selling at this point. Best bet is to ride out the foreclosure & suck up the free rent until the foreclosure is completed. You'll want to vacate before there's an eviction filed, because that will impact your ability to rent.
There usually isn't a tax issue, because chapter 7 = insolvent & there's an exemption in the tax code for insolvent.
Any documents you sign after the bankruptcy could add liability for you, so I wouldn't be signing anything at all.
That's what's got me worried about doing a short sale or deed-in-lieu. What's written in the paperwork and the documents. I don't want to wind up signing something stupidly and then being liable for anything. Although the Foreclosure is embarrassing it's probably my safest bet.
I Surrended the house in chapter 7. The trustee owned the home until my bank won the house back during a court hearing two weeks ago. My bankruptcy was discharged three months ago. So now all the decisions are back in my hands not in my bankruptcy trustees hand as was the case a few weeks ago. So now it's up to me as to what I want to do and because I have a good buyer and a good offer I was considering redoing the short sale. My primary concern and purpose of this thread was would I be liable for any deficiencies or any tax implications on the deficiency amount. My assumption is that I wouldn't be because the mortgage debt was was surrendered in bankruptcy Chapter 7
You are living in a house that you no longer own and no longer have a mortgage because it should have been discharged in the Ch 7. So, why are you involved at all in a short sale process by the current owner? There is nothing back in your hands and no decision you have to make except where to live next, because you have no legal interest in the house. You could be evicted tomorrow.
Your bankruptcy should have relieved you of any legal obligation for all of your debts, including your mortgage. You have no obligation to sign anything because you owe no one and do not own the property. My advice is sign nothing and move.
You are living in a house that you no longer own and no longer have a mortgage because it should have been discharged in the Ch 7. So, why are you involved at all in a short sale process by the current owner? There is nothing back in your hands and no decision you have to make except where to live next, because you have no legal interest in the house. You could be evicted tomorrow.
Your bankruptcy should have relieved you of any legal obligation for all of your debts, including your mortgage. You have no obligation to sign anything because you owe no one and do not own the property. My advice is sign nothing and move.
But he "needs" at least 3 months of free rent so he can afford to move. See post #3.
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